French Business Leaders Grow Increasingly Pessimistic Amid Budget Disputes and Political Strain in Early 2026

At the outset of 2026, French business leaders are expressing deep concern and frustration over the country's economic trajectory, compounded by government budget decisions and ongoing political instability.

Prime Minister Sébastien Lecornu's recent move to invoke the 49-3 procedure to pass the government budget has sparked particular ire within the business community. Despite previously promising not to use this measure, Lecornu pressed forward with the budget, which imposes a controversial tax on France's 300 largest companies—entities representing a quarter of national employment and half the country's exports—while sparing retirees from additional financial burdens. This approach has alarmed executives who see the tax as unfairly targeting businesses and ultimately increasing costs for consumers. Joëlle Dago-Serry, a prominent business leader, lamented the "saturation" and frustration felt by many in the private sector, warning that these measures threaten job creation. Rodolphe, another figure from the construction industry, predicted prices would rise as firms pass on these costs, thereby exerting negative effects on economic conditions.

Further aggravating the outlook are concerns regarding pension sustainability. Rafik Smati highlighted that already 28% of wages fund current pensions, with fears that unchecked increases could necessitate severe future pension cuts.

This economic unease is mirrored in broader sentiment. The annual PwC study presented at the World Economic Forum (WEF) in Davos revealed a stark drop in confidence among French business leaders. Only 11% of French executives expressed optimism about the country's economic prospects for 2026, down from 24% the previous year. This contrasts sharply with the global environment, where 60% of executives expect economic improvement, even as worldwide confidence in revenue growth has fallen to 30% from 47% in early 2025.

The political backdrop includes an expected coalition of government support from the Socialist Party and Republicans, which might secure Lecornu's position despite motions of censure from opposition parties.

Overall, the combination of fiscal policy measures, political uncertainty, and pessimistic business sentiment paints a challenging economic picture for France at the start of 2026.